The Crosby Company provides advertising services for clients across the nation. The Crosby Company is presently working on four projects, each for a different client. The Crosby Company accumulates costs for each account (client) on the basis of both direct costs and allocated indirect costs. The direct costs include the charged time of professional personnel and media purchases (air time and ad space). Overhead is allocated to each project as a percentage of media purchases. The predetermined overhead rate is 70% of media purchases. On June 1, the four advertising projects had the following accumulated costs:

June 1 Balances

Starks Bank ......... $ 180,000

Finley Airlines ........ 54,000

Branch Hotels .........140,000

Sanders Beverages ....... 76,500

Total ........... $ 450,500

During June, The Crosby Company incurred the following direct labor and media purchase costs related to preparing advertising for each of the four accounts:

At the end of June, both the Starks Bank and Finley Airlines campaigns were completed. The costs of completed campaigns are debited to the cost of services account. Journalize the summary entry to record each of the following for the month:
a. Direct labor costs
b. Media purchases
c. Overhead applied
d. Completion of Starks Bank and Finley Airlinescampaigns

Transcribed Image Text:

Direct Labor Media Purchases Starks Banlk Finley Airlines Branch Hotels Sanders Beverages Total 126,000 56,250 247,500 281,250 711,000 $472,500 416,500 303,750 227,250 $1,420,000